On Thursday, both US and UK crude futures’ prices had been faltered nearly 8 per cent, while the sell-off wave was mostly wended by a revival of concerns regarding deterioration of demands alongside possibilities of a resurgence of pandemic cases in the United States.
Aside from that, a record high crude oil inventory built in the United States had added to further strains on an ailing global oil market which has been hanging on into the treacherous waters since the onset of a “lose-lose” crude oil price war between Riyadh and Moscow in March this year.
Nonetheless, Thursday’s tottering of the crude oil futures’ prices was almost entirely galvanized by a sudden uptick in US crude oil inventory alongside a slanderous demand outlook which was endorsed just yesterday by the US Federal Reserve, while a dive of roughly 20 per cent in fuel consumption level despite an easing off of the lockdowns in most of the US states had added to further worries.
Dour economic outlook on FOMC minutes, rising US inventories weigh on crude oil price
Meanwhile, as Wednesday’s FOMC minutes appeared to have downsized optimism over global economic health and raised an alarming bell over a series of local spikes in pandemic cases that would be lowering the people’s confidence in restaurants, entertainments and traveling, the US West Texas Intermediate crude oil futures’ prices were plunged by 8.2 per cent to $36.34 a barrel, while the UK crude futures’ prices had pummelled 7.6 per cent to wind down the day at $38.55 a barrel.
Aside from that, while a gloomier demand outlook has been adding further pains into an already overflooded crude oil market, the US crude refineries surged unexpectedly by 5.7 million barrels last week to a record 538.1 million barrel, mostly built on the Gulf crude imports from Saudi Arabia.
Meanwhile, referring to a bearish bias into the crude oil market that had compounded further following the Wednesday’s FOMC minutes, a director of market research at Tradition Energy, Gene McGillian said, “The reality is we have glut levels of global fuel inventories. The fundamental picture still has bearish factors that the market was turning a blind eye to”.